India’s IT sector is facing a growth crisis; Daljit Kohli says he’s already gone

India’s information technology sector, a 30-year engine of wealth for the country, is at a crossroads. A brutal sell-off fueled by weak global cues, cautionary commentary from Accenture and widespread concern about AI disruption has left investors scrambling for answers. For independent market expert Daljit Kohli, the answer is simple, stay out.

“The jury is still out”: Why Kohli has zero IT exposure

Kohli has held a bearish view on the sector for several months and is not softening his stance. His main concern is not that Indian IT companies will disappear, which he is clear they won’t, but that the defining characteristic of the sector, growth, is missing. “My investment style is basically growth and that is missing here,” he told ET Now, adding that the market’s exaggerated reaction to every piece of weak data indicates how deeply investors distrust the sector’s near-term trajectory.

The Accenture numbers, which sent the market into a frenzy, were not catastrophic in isolation. But Kohli argues that the magnitude of the reaction reflects a deeper consensus: the growth path for Indian IT majors over the next few years looks structurally challenging. While some niche players and those who successfully lead AI-led services may survive and thrive, he warns that identifying those winners right now is almost impossible. “Who will survive – the jury is still out.”

“When a sector goes out of reckoning, it takes a long time. Equity markets are about the future and we are clear that this sector will take a long time to stabilize,” says Kohli.

Jio’s IPO: Unlocking value, not cash crunch

Turning to the other headline of the day, Reliance Jio’s DRHP has hit the market, a fresh issue of 27 crore shares that has reignited the debate over where the money will go. Kohli has read that this is less about raising emergency capital and more about unlocking strategic value.

Telecom is a perpetually capital-hungry business, he notes, with constant technological upgrades, AI integration, app ecosystems and fierce two-player competition with Bharti Airtel all demanding ongoing investment. But the deeper purpose of the IPO, according to him, is to give investors a clean, straightforward vehicle to bet on India’s telecom story without the baggage of Reliance’s oil refining and retail businesses. “If one wants to play only telecom business and not traditional businesses, this will provide an opportunity,” Kohli said.

For long-suffering Reliance shareholders who have seen the stock stagnate, the listing could be the catalyst the market has been waiting for — separating Jio’s high-growth digital narrative from the conglomerate’s legacy valuation drag.